Justia Contracts Opinion Summaries

Plaintiffs DISH Network Corporation and DISH Network LLC sought a declaratory judgment that their commercial general liability and excess liability insurers (collectively the Insurers), Arch Specialty Insurance Company, Arrowood Indemnity Company, Travelers Indemnity Company of Illinois, XL Insurance America, Inc., and National Union Fire Insurance Company of Pittsburgh, Pa., had a duty to defend and indemnify plaintiffs in an underlying patent infringement action. The district court granted summary judgment in favor of the Insurers, plaintiffs appealed, and the Tenth Circuit reversed and remanded for further proceedings. On remand, the Insurers moved again for summary judgment, but on different grounds. The district court granted the Insurers’ motions, and plaintiffs appealed. Finding no reversible error this time, the Tenth Circuit affirmed the district court's judgment. View "Dish Network v. Arch Specialty Insurance" on Justia Law

NAF filed suit against Trading for breach of contract and sought damages, alleging that Trading wrongfully repudiated the contract and that, as a consequence of the breach, NAF lost financing commitments provided by third parties and was unable to complete the acquisition of Hampton. On appeal, NAF challenged the district court's judgment in favor of Trading. The court certified the following question to the Supreme Court of the State of Delaware: Where the plaintiff has secured a contractual commitment of its contracting counterparty, the defendant, to render a benefit to a third party, and the counterparty breaches that commitment, may the promisee-plaintiff bring a direct suit against the promisor for damages suffered by the plaintiff resulting from the promisor’s breach, notwithstanding that (1) the third-party beneficiary of the contract is a corporation in which the plaintiff-promisee owns stock; and (ii) the plaintiff-promisee’s loss derives indirectly from the loss suffered by the third-party beneficiary corporation; or must the court grant the motion of the promisor-defendant to dismiss the suit on the theory that the plaintiff may enforce the contract only through a derivative action brought in the name of the third-party beneficiary corporation? View "NAF Holdings, LLC v. Li & Fung (Trading) Ltd." on Justia Law

In this case, Subodh Raysoni raised consumer fraud claims under the Fair Business Practices Act of 1975 against Payless Auto Deals, LLC, alleging that Payless gave false assurances that a used minivan never had been in a collision or otherwise damaged - assurances upon which he relied - when he purchased the minivan from Payless. Contending that the terms of their written contract rendered any such reliance unreasonable as a matter of law, Payless moved for judgment on the pleadings. The trial court granted that motion, and the Court of Appeals affirmed. Payless relied on several provisions of the contract disclaiming warranties, but the Supreme Court held that its reliance was misplaced because these disclaimers were not absolute and unequivocal enough to warrant judgment on the pleadings: "We cannot say as a matter of law that the contractual disclaimers of warranties - which are, at least arguably, equivocal and limited - preclude any reasonable reliance in this case on a written Carfax report furnished by Payless. We do not mean to suggest that the provisions of the contract upon which Payless relies would not have been most reasonably understood by a customer just as Payless argues. On these pleadings, we cannot say as a matter of law that Raysoni will be unable to show that his reliance on representations that the minivan was undamaged and never had been in a wreck - particularly the written Carfax report - was reasonable." Judgment on the pleadings ought not have been awarded to Payless. The case was reversed and remanded for further proceedings. View "Raysoni v. Payless Auto Deals, LLC" on Justia Law

In 1999 Seltzer registered the word “Kashwére” as a trademark for chenille soft goods. In 2009, Seltzer sold his company’s assets, including the trademark, to its principal officers. They formed TMG, which granted Seltzer an exclusive license to sell chenille products under the Kashwére name in Japan, through Flat Be. TMG claims that Seltzer violated his license by creating USAJPN and transferring to it all rights conferred by his license, to create an appearance of distance between Seltzer and Flat Be. Although Seltzer owned a majority interest in USAJPN, he needed TMG’s approval for the transfer. Flat Be also created a line of fabrics, “Kashwére Re,’ that are not chenille. Seltzer’s license does not authorize use of the Kashwére name for products that are not chenille, but he claimed that a TMG owner approved the Kashwére Re project. USAJPN also failed to comply with a requirement to disclose the TMG licensee. The district judge denied TMG’s request to order the license cancelled or to enjoin future violations and award damages. The Seventh Circuit upheld summary judgment in favor of TMG on Seltzer’s and Flat Be’s counterclaims, but reversed summary judgment in favor of Seltzer and Flat Be on TMG’s claims.View "Kashwere, LLC v. Kashwere USAJPN, LLC" on Justia Law

Due to a dispute between the Citrus County Hospital Board and the Citrus Memorial Health Foundation, Inc., the Legislature enacted a special law that reeancted the Board’s charter. Section 16 of the charter included subsections that specifically addressed the Board’s relationship with the Foundation. The Foundation filed suit against the Board seeking a declaratory judgment that the the special law was an unconstitutional impairment of the parties’ contracts. The circuit court granted summary judgment for the Board, concluding (1) the Foundation was prohibited from challenging the constitutionality of the special law because it was a public or quasi-public corporation; and (2) the special law did not impair the Foundation’s contracts. The First District Court of Appeal reversed, holding that, as applied to the Foundation, the special law significantly altered the parties’ contractual rights and was an unconstitutional impairment of their contracts. The Supreme Court affirmed, holding (1) the Contract Clause of the Florida Constitution applies to the Foundation’s contracts; and (2) as applied, the special law unconstitutionally impairs the Foundation’s contracts.View "Citrus County Hosp. Bd. v. Citrus Memorial Health Found., Inc." on Justia Law

Western Ecosystems Technology, Inc. (Western) and GreenHunter Wind Energy, LLC entered into a contract whereby Western provided the LLC consulting services. When the LLC paid nothing for Western’s services, Western brought a breach of contract action against the LLC. Western obtained a judgment against the LLC. Because the LLC had no assets upon which Western could execute, Western brought this action against GreenHunter Energy, Inc. (Appellant), the sole member of the LLC, seeking to pierce the LLC’s veil and hold Appellant liable for the LLC’s contractual obligations. The district court found in favor of Western, pierced the LLC’s veil, and awarded a judgment of $45,807 against Appellant. The Supreme Court affirmed the district court’s judgment piercing the LLC’s veil and imposing liability on Appellant for its debt to Western, holding that the district court correctly applied the applicable law and that its findings of fact were not clearly erroneous.View "Greenhunter Energy, Inc. v. W. Ecosystems Tech., Inc." on Justia Law

This case arose when plaintiffs signed an Asset Purchase Agreement to purchase a Mercedes-Benz dealership from Asbury. Plaintiffs filed suit against MB after MB exercised a right of first refusal (ROFR) contained in its dealership agreement with Asbury. The district court granted summary judgment in favor of defendants. The court concluded that, because MB exercised its ROFR, plaintiffs have no claim for intentional interference with prospective economic advantage, which requires plaintiffs to demonstrate that MB committed a legal wrong independent from the interference; nor can MB's conduct be considered wrongful and plaintiffs have no claim for intentional interference with contract; plaintiffs have no claim for fraudulent concealment where plaintiffs misinterpreted the Acknowledgement Agreement as a guaranty and because the purportedly concealed facts of that agreement were not material and had been disclosed already to plaintiffs or were readily discoverable; even if plaintiffs were entitled to notice from MB of its exercise of the ROFR, the notic eplaintiffs received was both timely and in proper form; because plaintiffs have an implied right of action under California Vehicle Code 11713.3(t)(6), the court reversed summary judgment as to this claim; and the court affirmed the grant of summary judgment to MB on plaintiffs' claim under California's Unfair Competition Statute, Cal. Bus. & Prof. Code 17200. Accordingly, the court affirmed in part, reversed in part, and remanded.View "Fresno Motors v. Mercedes-Benz" on Justia Law

Northstar Founders, LLC is a North Dakota company which was seeking financing to build a canola processing plant near Hallock, Minnesota. Northstar worked with several companies in an effort to raise funds for the project. In early April 2008, Northstar entered into a financial advisory agreement ("MDL Agreement") with MDL Consulting Group and Irish Financial Group, Inc. The agreement provided that MDL and Irish might act as a finder of potential sources of financing and required Northstar to pay various fees to MDL and Irish for their services, including success and equity fees if certain conditions were met. MDL and Irish introduced Northstar to Peter Williams. Williams was an investment banker in the New York office of Oppenheimer & Co., Inc., and was also a member of the board of directors of Hayden Capital Corp. MDL and Irish suggested Northstar enter into a financial advisory agreement with Hayden Capital USA (a subsidiary of Hayden Capital). Northstar signed a non-exclusive letter agreement with Hayden USA. Under the agreement, Northstar retained Hayden USA to act as a non-exclusive financial advisor and placement agent in connection with financing for the canola processing plant. Under the agreement, Hayden USA agreed to identify and introduce Northstar to potential purchasers or lenders and assist in structuring the financing and terms of the equity or debt financing. The agreement provided Northstar would pay Hayden USA a financing fee as compensation for its services if the conditions of the agreement were met. Stephen Hayden signed the agreement for Hayden USA. On April 28, 2008, Northstar entered into a confidentiality and non-disclosure agreement with Oppenheimer, which stated the purpose of the agreement was to facilitate business dealings between Northstar and Oppenheimer associated with the development of the processing plant. Williams signed the agreement for Oppenheimer. In July 2008, Williams introduced Northstar to PICO Holdings, Inc. In 2010, PICO Holdings and Northstar negotiated a transaction to build the canola processing plant. Hayden USA demanded a finder's fee from Northstar under the Hayden Agreement, claiming Williams was working on behalf of Hayden USA when he introduced Northstar to PICO Holdings. Irish and MDL also sought a finder's fee from Northstar, claiming they satisfied the terms of the MDL Agreement when they introduced Northstar to Williams. Hayden Capital US, Hayden Capital Corp., Peter Williams, and Stephen Hayden, and MDL Consulting Group, LLC and Andrew Zweig appealed, and Northstar Founders, LLC cross-appealed district court judgment declaring that Northstar did not owe Hayden or MDL finder's fees for securing financing for a canola processing plant. Finding no reversible error, the Supreme Court affirmed.View "Northstar Founders, LLC v. Hayden Capital USA, LLC" on Justia Law

In 2010, GM sold its subsidiary Saab to Spyker: Spyker acquired a majority interest in Saab, and GM retained a minority interest through preferred shares. The parties entered into an agreement under which GM granted Saab a license to make certain Saab models using GM intellectual property. It prohibited Saab from assigning or transferring its rights without GM’s prior written consent until 2024. In 2010-2011, Saab faced financial hardship and attempted to enter into investment arrangements with Youngman, a Chinese automobile manufacturer. GM refused to approve any agreements that involved Chinese ownership or control of its licensed technology. Saab filed for voluntary reorganization under Swedish law. Saab and Youngman negotiated an agreement and circulated an unexecuted copy: Youngman would provide Saab an immediate cash infusion as a loan, which would be converted into an equity interest in Saab after Saab ceased using GM technology. A GM spokesperson made statements indicating that the agreement was not materially different than what was previously proposed. Based on GM’s position, Youngman backed out; Saab went into bankruptcy. Saab sued for tortious interference with economic expectancy. The district court dismissed, finding that Plaintiffs failed to establish a valid business expectancy and intentional interference by GM. The Sixth Circuit affirmed.View "Saab Automobile AB v. General Motors Co." on Justia Law

In 2006, Richard Myers owned the property at issue in this case. At the time, the property was subject to a deed of trust in favor of First Horizon Home Loans. Myers enlisted Michael Horn and his company, Frontier Development Group (FDG) to build a residence on the property, which First Horizon financed. However, in April of 2007, Myers filed for bankruptcy, and First Horizon rescinded the construction loan and instructed FDG to halt construction when the project was only fifty percent complete. The structure was left exposed to the elements for fourteen months. Following Myers' bankruptcy, foreclosure proceedings were initiated, and Myers hired Kathleen Horn (Michael Horn's wife), of Windermere Real Estate/Teton Valley to list the property for sale. The Caravellas, who were Ohio residents, looking for property in the Teton Valley, contacted their real estate agent who put them in touch with Kathleen Horn who provided them with information on the stalled Myers project. Kathleen Horn eventually put the Caravellas in touch with Michael Horn. The Caravellas traveled to Idaho, met with Kathleen Horn, and spent two days inspecting the property. The Caravellas testified that Kathleen Horn minimized issues with the house, telling them that it was "in good shape,""structurally sound,"and a "great house."The Caravellas chose not to have a professional inspection performed and closed on May 5, 2008. After closing, the Caravellas and Michael Horn agreed that Horn would complete construction on the house in accordance with Myers' original plans. In reaching this agreement, the Caravellas testified that they believed they were dealing with Horn as an individual. The total contract price for the first phase of work that the Caravellas authorized was $88,500. However, the Caravellas paid FDG $138,097.24 for the first phase before refusing to pay any more. Much of the money that the Caravellas paid to FDG was for unauthorized work or work that was completed in a nonconforming or substandard manner. The Caravellas hired a second builder to complete the first phase and to remedy the substandard work. FDG initiated this action by filing a complaint to foreclose on a lien for construction services and building materials provided to, but not paid for by, the Caravellas. The Caravellas filed an amended counterclaim alleging that FDG and Horn: (1) breached the parties' contract; (2) breached the duty of good faith and fair dealing; (3) violated the Idaho Consumer Protection Act; (4) breached the implied warranty of habitability; (5) committed slander of title; (6) committed fraud and misrepresentation; (7) engaged in a civil conspiracy; and (8) acted negligently. The district court held that FDG's lien was defective and dismissed it. The district court also held that FDG breached its contract with the Caravellas by: (1) failing to complete agreed upon work in conformity with the plans and in a workmanlike manner; (2) charging the Caravellas for unauthorized and defective work; and (3) substantially overbilling the Caravellas for work and materials that were not authorized and never provided. As to the Caravellas' fraud counterclaim, the district court concluded that the Caravellas failed to establish all nine elements of fraud and dismissed the claim. The district court also concluded that Horn was not personally liable. The district court awarded the Caravellas $113,775.45 in attorney fees, $5,484.83 in costs as a matter of right, and $200.00 in discretionary costs. The Caravellas timely appealed. Upon review, the Supreme Court concluded the district court erred by applying the incorrect evidentiary standard to the Caravellas' fraud counterclaim, but that error was harmless. The Court affirmed that portion of the district court's judgment dismissing the Caravellas' fraud claim, and reversed that portion of the judgment dismissing the Caravellas' claims against Michael Horn personally. In all other respects, the Supreme Court affirmed the district court's decision.View "Frontier Development Grp v. Caravella" on Justia Law